Which of the following financial accounts appear(s) in a company's Balance Sheet?
Show answer Hide answer
Answer: D. (i), (iii), (iv) and (v) above
Explanation
Standard accounts such as share capital, reserves, and tangible assets appear on a company's balance sheet. Financial statements summarize a firm's financial position at a specific point in time by detailing assets, liabilities, and equity. Share capital and tangible assets represent foundational components of financial health. A balance sheet follows the core accounting equation where total assets equal liabilities plus owners' equity. Permanent accounts like retained earnings, reserves, and fixed assets carry forward across accounting periods. Temporary revenue and expense accounts, conversely, are closed out at year-end.
Investors, creditors, and managers examine balance sheets to evaluate corporate solvency, liquidity, and capital structure. Accurate reporting ensures compliance with international accounting standards and regulatory frameworks. This transparency underpins modern corporate finance and lending decisions. Partial account listings fail to capture the complete suite of permanent accounts required for a proper balance sheet. Only including isolated items violates standard financial reporting guidelines and omits critical equity and asset data.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
Related questions
Q1. Which entry accurately reflects the creation of a reserve for discounts on accounts payable?
Show answer Hide answer
Answer: C. Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c
Creating a reserve for discounts on accounts payable involves debiting the reserve account and crediting the profit and loss account to reflect the adjustment.
Q2. Which of the following is excluded from operating income?
Show answer Hide answer
Answer: C. Interest on FDs
Interest on fixed deposits is generated from surplus investments rather than core trading operations. Accounting standards classify investment returns as non-operating or other income categories. Operating income strictl...
Q3. Identify the incorrect statement from the choices provided below
Show answer Hide answer
Answer: D. Assets are to be shown in the Balance Sheet at the realizable value
Assets are reported at historical cost minus depreciation rather than fluctuating realizable values. The going concern principle assumes the business will continue operating without liquidation. Reporting assets at marke...
Q4. Which of the following is not classified as a financial statement?
Show answer Hide answer
Answer: D. Trial Balance
A trial balance is merely a working schedule used to verify ledger debit and credit equality. It serves an internal bookkeeping check rather than serving as a formal financial statement. Formal financial statements compr...
Q5. Which among the stated relationships is/are incorrect?
Show answer Hide answer
Answer: D. Both B. and C. above
Net profit is calculated by subtracting operating expenses from gross profit rather than adding them. Cost of sales equals opening stock plus purchases minus closing stock making addition incorrect. Since both statements...
Q6. Which of the following is not classified as an intangible asset?
Show answer Hide answer
Answer: C. Accounts Receivable
Accounts receivable represent short-term financial claims on customers, making them a current financial asset rather than an intangible asset. They arise when a business sells goods or services on credit, expecting cash...